AGL has put a softer first half down to various factors, including lower market volatility related to milder weather.
The company posted a profit after tax of $94 million in the first half (H1) of the 2025–26 financial year (FY26), down from $162 million in H1 FY25.
While AGL’s bottom line was impacted by a range factors, the gentailer saw an increase in onerous contract provisions* of $42 million after-tax related to renewable energy power purchase agreements. It was also weighed down by $14 million after-tax related to business restructuring activities along with a $12 million impairment related its abandonment of the Gippsland Skies offshore wind farm in Victoria.
Nicks said AGL’s results reflected “strong operational and financial momentum” across the business, benefited by improved reliability and flexibility of its generation portfolio.
But AGL didn’t see the desired volatility in the energy market.
“Although the market experienced unusually less volatility in the half compared to historical averages, the longer-term forecasts for energy demand as well as our expectations for volatility remain strong,” AGL managing director and chief executive officer Damien Nicks said.
“Importantly, our stronger fleet availability and flexibility, coupled with excellent battery performance, helped mitigate the impacts of lower market volatility, driven by milder weather and lower transmission constraints.”
AGL also announced it is offloading its telecommunications (telco) business to Aussie Broadband (ABB), with ABB to run the division under the AGL brand through a new strategic partnership.
ABB will oversee AGL’s 400,000 telco services, with AGL to receive approximately 22.03 million ABB shares (or 7.5 per cent of total equity), equating to $115 million in value.
“Under this strategic partnership, AGL will act as a sales and marketing channel for Aussie Broadband’s telco offers under the AGL brand, with clear incentives to support strong customer growth,” Nicks said.
“Customers will continue to benefit in the convenience and value provided by bundling AGL energy services and telco services provided by Aussie Broadband. As such, AGL will continue to deliver the retention benefits evidenced by this bundled offering to date.”
Nicks said this approach “simplifies operations”, while strengthening AGL and ABB’s “long-term alignment” through an equity-based partnership.
The transaction is expected to settle in June.
*Onerous contracts relate to those where the costs of meeting contract obligations outweighs the economic benefits.
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